South Africa campuses face funding shortage after tuition fee freeze

JOHANNESBURG (Reuters) - South Africa's government is grappling with a 2.3 billion rand ($165 million) shortfall at university campuses after President Jacob Zuma gave in to protesting students' demands and ruled out tuition fee increases next year, officials said on Thursday.

Classes and examinations have resumed after three weeks of disruption, but the demonstrations over the cost of university education - prohibitive for many blacks - highlighted frustration with the inequalities that persist two decades after the end of white-minority rule.

Some university students have demanded free higher education, saying Zuma's action to freeze fee increases for next year did not go far enough, and their leaders have warned that protests could flare up again in the future.

The state plans to contribute the lion's share of 1.935 billion rand next year to plug the shortfall, while universities will contribute 394,727 million rand, the director-general of the department of higher education, Gwebinkundla Qonde, said.

Theuns Tredoux, the chief financial officer at the same department, said a portion of the shortfall will be covered from the current budget and the remainder from next year's budget.

"All the money paid to institutions to cover a portion of the zero percent fee increase will be paid out from existing allocations. Additional allocation would be applicable for the 2016/2017 financial year," Tredoux told parliament.

Finance Minister Nhlanhla Nene has said his next budget, due in February, will take into account the needs of universities, and that a process to take money from other skills development funds and move them to universities was already underway.

However, the opposition Democratic Alliance party's higher education shadow minister Bellinda Bozzoli warned it would challenge transferring cash to cover the estimated shortfall from government funds that are meant to provide grants to institutions denied funding under white minority rule.

Adam Habib, who heads an association of the country's universities and is also the Vice-Chancellor of the University of the Witwatersrand where the protest dubbed #FeesMustFall began on Oct. 13, said negotiations were still underway on how much each institution would contribute.

Universities that are well-off will contribute a maximum of 30 percent towards the shortfall, while the rest will contribute between 0 percent and 30 percent, Habib told Reuters.